Q.Explain Adam Smith's four canons of taxation.
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Start your 14-day free trial to unlock the full solution →1. Canon of Equity — a tax should be levied in proportion to the taxpayer's ability to pay; those with greater income or wealth should contribute a proportionately (or progressively) larger share, so that the real sacrifice involved is roughly comparable across taxpayers.
2. Canon of Certainty — the tax a person is liable to pay — the exact amount, the time by which it must be paid, and the manner of payment — should be clear and certain in advance, both to the taxpayer and to the tax authority, leaving no room for arbitrary demands.
3. Canon of Convenience — a tax should be collected at the time and in the manner most convenient for the taxpayer to pay it — for example, deducting income tax at source from salary each month, rather than demanding one large lump-sum payment at year-end when the taxpayer may not have the cash readily available. …
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